After what appeared to be a brief break, China is resuming its industries’ regulatory exercise, shifting attention this time to sectors that were not touched when it started about two years ago.

Early this week, the Chinese authority released new rules designed to curb comments on social media and live-streaming, a move said to target dissent. But another set of rules announced on Friday is giving attention to the pension market.

China Securities Regulatory Commission (CSRC) has announced new rules that will regulate private pension investment via mutual funds, Reuters reports. The move is geared towards tackling the challenges facing China’s aging population, and it follows the private pension scheme that Beijing launched in April.

Under the new rules published by the CSRC late on Friday, qualified products and sales agents will come under a scheme that will channel fresh savings into the country’s capital markets.

Under the scheme, individuals will be able to invest their pensions in a range of financial products such as mutual funds, savings deposits and insurance products – providing more options for wealth building and financial stability while opening up a lucrative new market for banks and financial companies. Reuters noted that the lucrative pension market has lured foreign asset managers including Fidelity International and BlacRock.

The proposed rules “have set a relatively high bar for products and institutions, and are designed to ensure safety of pension fund investment and protect investors’ interest,” the CSRC said in a statement on its website.

Initially, pension target funds with at least 50 million yuan ($7.48 million) of assets over the past four quarters are eligible under the pilot pension scheme, the CSRC said.

Other types of retail funds with clear investment strategies and good long-term track records will be gradually added to the eligibility list as the scheme expands, the CSRC said.

The scheme enables people to make annual contributions of up to RMB 12,000 (US$1,846) into a pension account set up through a centralized platform. China has a robust pension market expected to grow from US$300 billion to US$1.7 trillion in 2025.

However, ‘the financial institutions and financial products permitted to be involved in the operation of individual pensions will be determined by the relevant financial regulatory authorities and released to the public through the service platform.’

Currently, there are 91 pension target funds that meet the CSRC’s criteria, according to TF Securities.

The rules require fund managers and sales agents participating in private pension business to set up internal control systems, adopt long-term incentives, and ensure independent operation of the pension assets.

China is planning to sustain economic growth by giving its aging population spending power. China’s population will be made up largely by old people in years to come. According to the World Health Organization, in 20 years, 28% of China’s population will be more than 60 years old, 18% up from what it is today.

China has early legal retirement ages; 60 for men, 55 for female white-collar workers, and 50 for female blue-collar workers. Besides creating a gap in the country’s workforce contribution to economic growth, early retirement means reduction in employee taxes.

Thus, China is seeking to ensure that the golden age population will continue to have access to disposable income after retirement. This, in addition to other strategies such as common prosperity, will ensure that everyone has sufficient spending power, boosting the country’s financial stability,

In a post here on LinkedIn, a comment from a member made it look like ancestral Africa was all against women. While every culture has many regrettable components (think of killing of twins, slavery/imperialism of Europe, etc), I will like to note, on many instances, that Africa actually treasured women and put so much power in the hands of women, despite men appearing to be in charge.

In the Igbo Nation, a mother is supreme. That is why the Igbos name their daughters “Nneka”. The peerless Chinua Achebe wrote “a man belongs to his fatherland and stays there when life is good, but he seeks refuge in his motherland when life is bitter and harsh.” So, if things become hard, you run to your mother’s place.

And when you get there, things open up. When a man arrives at his mother’s birthplace, he automatically assumes rights over most indigenes. If you check, as elders break kola nuts and drink palm wine, they first ask “do we have nwa-ada [child to our daughter] here?” If there happens to be nwa-ada, they will acknowledge him, and once after taking the palm wine, they will give him over the sons of the soil. The idea is this: no matter what brought you to your mother’s birthplace, you are welcome! We will feed you before we eat!

And those daughters – Umu-ada (some communities use Ndi Ada Nwanyi)- have an unusual influence in their fatherlands despite being married many miles away. In Ovim, my village, you are better off dealing with the Nigeria Police than them because with them, you have no chance. The anticlimax of a troublesome man happens when the elders (men) invite Umu-ada to come and help. 

Let us not see globalization as all evidently pure with the mindset that Africa’s culture is all primitive. Many practices were bad and those cut across all cultures including Europe, Asia and Africa. This is the key – we need to push for an equal world on gender, race, nationality, etc.

My agric science teacher made raising organic chicken, goat, etc as being “bad” [they’re small, take years to grow, etc}. But when I got to US, I noted that only the “rich” actually eat organic because they are expensive.  Africa has got many things right even before the world comes along. The Igbo Apprenticeship System is the ancestral version of the stakeholder capitalism we preach today in Wall Street.

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Comment: The rights/priviledges of the “child of a daughter” is news to me given that married daughters do not seem to hold privileges even in their compound. I guess the principles are different across villages.

My Response: That is one distortion of African culture which many push, comparing it with the European model, without taking a wholistic viewpoint. A daughter does hold rights in her father’s compound and land. When a lady is being married, families sell properties, take loans, etc to buy her things which will help her begin a new life in the husband’s place.  They do this to make sure her standard of living does not degrade after the marriage.

Boys do not get that. And when the parents die, they automatically assume what remains. Sure, you can argue that the sons get more. But understand that the daughter’s husband assumes his own parent’s which seems to balance out, under the ancestral agrarian system. What we can say is this: African culture is unfair  to unmarried daughters who get nothing!

Every daughter in the ancestral Igbo nation holds “privileges even in their compound” and that is on display on her Igba nkwu day (traditional wedding) as the family shares her “inheritance”.  Sure, because we have shares, bonds, etc as assets now, those have to be updated. But no one should accuse ancestral Africa of discriminating against daughters.

Comment 2: Apt! Umu-ada is indeed a very powerful traditional institution in Igbo land till date. However, I’m not quite sure as to the extent our modern day umu-ada particularly the ones that live in Lagos, Abuja, and other cities recognize and play their roles in those families and villages they come from.

We must sustain our rich traditions as we outplay each other in effort to perfect the imported ones white men foisted on us!

Nneka – “Mother is Supreme”

Business model encapsulates the logic of a firm and the way it uses factors of production to create value for stakeholders. To a large extent, that is the outcome of any business strategy framework. A good strategy decides on the best business model through which a company will compete and operate in the market.

In the scheme of things, you can have many models at the end of the strategy session. The business model you commit your business to has a catalytic impact on your success. Period – business model is supreme.

At Tekedia Mini-MBA Live today, I will explain that supremacy and why leaders must pay attention to the business models they operate. Microsoft had a lost decade until they changed a CEO. When the new boss man came, he changed the business model. Looking at the plot, the impact is significant and well correlated. I will present more cases to show why a change in CEO who comes with a new business model has transformed the destinies of firms.

Yes, the company has been bleeding revenue, but they changed the CEO. Magically, using the same staff on the products, the revenue started going north. What happened? New business model has been deployed.

Join me at Tekedia Mini-MBA live; Zoom link in the Board.